Fed: Renters won't escape rate rise stress: welfare group

AAP General News (Australia)
08-08-2007
Fed: Renters won't escape rate rise stress: welfare group

CANBERRA, Aug 8 AAP - Renters will not escape the impacts of today's interest rate
rise, a housing welfare group says.

The Reserve Bank of Australia lifted its cash rate to 6.5 per cent from 6.25 per cent,
its highest level since November 1996.

Homebuyers can expect to pay about $50 extra per month on an average $250,000 mortgage
if banks pass on the increase in full.

But welfare group Australians for Affordable Housing says mortgage holders will not
be the only ones affected.

"Renters also feel the pain of mortgage rate increases and so we are very concerned
that at a time when renters are also struggling, we are not seeing increases to public
and community housing or any reform of commonwealth rent assistance," spokesman David
Imber told reporters in Canberra today.

Mr Imber said the rate rise will make the situation even worse for more than one million
Australians who are paying more than 30 per cent of their income on housing costs.

"We're very concerned that people may default on their loans as a result of this rise.

We've already seen default rates double across Sydney, we know that it's spreading right
across the country," he said.

Mr Imber demanded the government, and the opposition, come up with a plan to tackle
the housing affordability crisis.

"We need a plan for those people, we need a better way than simply having people at
the mercy of interest rate rises, we need a broad based, comprehensive plan."

That plan must include building more public and community housing, a reformed commonwealth
rent assistance scheme and a fairer tax system, he said.

AAP kc/sb/apm/jlw

KEYWORD: RATES HOUSING

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